Continued Risk On?
Since the Fed decided to do a U turn regarding rate hikes and signaled an end to the balance sheet runoff, we have seen the Chinese (PBOC) pushing a reflationary policy and the ECB finally accepting that they were behind the curve and revised growth expectations lower, while pushing out the chance for rate hikes and extending cheap credit to banks for a longer period. This is all happening as we see global growth slowing from where it was last year. The market is overjoyed by the dovish global status of the central banks. We at Minter are skeptical to the current levels on major equity markets, but respect the current feel good investor attitude, can continue for a while longer.
We will get further signals from the global central banks this week:
US Federal Reserve (FOMC) 20th of March, expect no change, perhaps we get news on balance sheet and also the market may get signal that they are too optimistic regarding possible cuts from the Fed this year. Current rate 2.5%
Bank of England (BOE) 21st of March, As recently as a month ago the BOE was warning of economic weakness, and the uncertainty regarding Brexit, nothing has changed. Current rate .75%
Swiss National Bank (SNB) 21st of March, we don’t expect anything too eventful from this meeting. Current rate -.75%
Central Bank of Norway (Norges Bank, NB) 21st of March. Hike seems to be a done deal, the focus is on the forward rate hike path, NOK has been strengthening the past week, and will take further clues on direction from this meeting. Current rate .75%
Reserve Bank of New Zealand (RBNZ) 26th of March. It is interesting to hear from the small central banks regarding what they are focused on and in this case to get a read on developments in China. Current rate 1.75%
By Friday, we will have gotten an update on the global central banks own expectations and input on the global economy. Feels like the banks are all comfortable with inflation expectations and that growth, although slower, is not heading toward recession levels.
|Ticker||Date Opened||Entry Price||Stop||Target Price||Current Price||% Change|
|Long CAMECO (CCJ:xnys)||12/03||11.92||11.20||13.00||12.42||+4,20%|
– Mark W